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The illusion of a discount price

Most of us living in the modern Western world can't imagine buying anything without a price tag on it. Speaking for myself, in a long life living entirely in The United States, I have never bought something by opening up negotiations. If you don't put a price on it, I don't know where to start, even if the price is negotiable.

That price has come to be known as the *retail price* or *list price*. It's the asking price, the price that the seller is willing to accept in exchange for the product. This is just a guess. An educated guess, based on the price of other products, and what the seller expects the buyer to pay, but still a guess. And the responsibility for that educated guess, the retail price, has now gone to the manufacturer. The seller, that is the retailer, just points to the pre-printed price on the package and smiles. That's what it costs!

And that is how the illusion of the discount price was born. The retailer can cross out the *real price* and instead charge a *discount price*. Neither one of these prices, of course, has anything to do with reality, they are just educated guesses of what people will pay. And where it can get you in trouble is if you believe them, instead of doing your own research.

Here in America, there was a time when people were so proud of knowing the price of things that a TV show was created just to showcase that knowledge. It was called *The Price is Right*. As a game show, instead of asking questions about history or sports, it asked people to give the correct retail price of a product. My parents generation were very knowledgeable about the retail price of things. They knew a bargain when they saw one. But my generation, and people younger than me, with a lot less knowledge, can be easily fooled.

So, to sell to people my age, or younger than me (which is just about everybody), the best thing to do is to create a price that looks like this $29.99 $19.99. Never mind that your competition is selling the same thing for $9.99. Most people won't know the difference, and they are too busy to do the research.

And that's the illusion of the discount price.